Amazon, Marketers Look To Insights From Fire Phone

Tech analysts and agencies aren’t expecting Amazon’s Fire Phone to threaten Apple or Samsung, but say it could still provide valuable customer insights to help fuel mobile and online
sales.

Launched Wednesday, the Fire Phone marked Amazon’s entrance into the crowded smartphone market with a device decidedly geared toward shopping. In addition to tying into existing
Amazon services like Kindle, Amazon Prime and MayDay, it offers a feature called Firefly that scans objects, or listens to music or movies, to identify products or content for purchase.

Despite those and other enticements, including the 3-D-like screen display, experts aren’t counting on consumers to flock to the Fire Phone. For starters, its $199 price tag is in line with
the standard pricing for flagship smartphones like the iPhone S5 and Samsung Galaxy S5, rather than undercutting the competition.

Amazon’s Appstore, with 240,000 apps, is also thin
compared to the roughly 1.2 million in both Apple’s App Store and Google Play. And distribution of the phone itself is limited to a single carrier -- AT&T -- while other top smartphones in
the U.S. are sold across the four major carriers.

In a new analysis of the Fire Phone launch, Forrester suggests novel features like Firefly won’t make much difference because shopping
isn’t a priority for smartphone owners. The main focus is on communication -- talking, texting, sharing photos and videos -- followed by media consumption like maps and social media.
“Conducting transactions is a distant third,” the report states.

But even if the Fire Phone fails to make an impact on the smartphone market, Forrester argues it can still prove
worthwhile to Amazon. That’s because it will provide deeper insights about its customers -- where they are and what they do -- than simply having one or two apps on someone’s phone.

Similarly, a separate report by digital agency 360i says the deeper understanding of consumer behavior Amazon
gains through the Fire Phone will lead to improved targeting, “making Amazon an attractive place for advertisers to test audience segmentation and messaging strategies. Amazon will also be able
to better track and optimize against mobile.”

The company would also be able to use the in-depth knowledge it gains about Fire Phone users to inform future product and services
offerings, even if the phone itself doesn’t last, according to Forrester. The firm suggests achieving handset sales in the millions would be optimistic.

Beyond customers, the Fire Phone
would help Amazon learn more about selling products and services through mobile, which accounted for $8 billion of its $74 million in sales last year.

Like Forrester, Jason Goldberg, who heads
the multichannel commerce practice and content group at Razorfish, doesn’t expect the first-generation Fire Phone be a big hit. But he does view the device as a milestone in shopping because it
brings consumers and retailers closer to an era of “always-on shopping.”

With Firefly in particular, “Amazon has taken a major step to reduce the friction between desire and
fulfillment,” he wrote in a post on his retailgeek blog.

In the coming months, 360i suggested brands should monitor the
Fire Phone’s impact on e-commerce efforts. “If adoption surges and Amazon collects data via user logins, then marketers could get access to powerful insights into things such as
mobile-to-desktop influence,” the agency stated. Of course, that’s a very big “if” given the hurdles the Amazon smartphone faces.